Transition to omni-channel retail: 4 key steps

Juha Mattsson

With knowledge from 100s of implementations of omni-channel solutions for retail, I wanted to share a few thoughts on the best practices we have learned so far. Taking both tech and process perspectives, I’ll outline and review the 4 key steps retailers ideally take along the transition.

The omni-channel customer experience

The concept of “multi-channel” has been at the heart of marketing and retail for several decades. It generally means to reach and interact with customers through multiple channels and could refer to a campaign making use of TV, radio, print media, direct mail, street ads, web, email and more. In retail, we could add web stores, physical stores and pop-ups.
So how does this differ to “omni-channel”? A widely accepted definition of omni-channel is that you have multiple channels which are all connected – whereas multi-channel is just multiple channels but the content, timing and audiences may differ between channels. A good example of the latter is when the web and retail physical stores work separately. In omni-channel, the channels not only have the aligned brand image, style and content, but are also aware of the engagements taking place in the other channels, and are capable of offering a seamless customer experience as consumers move forward in their purchase path hopping on and off between channels.
For example, a physical store would recognise a loyal customer entering and understand their shopping history, noting how they browsed three different pairs of shoes online a few days earlier. By recognising this buying path stage, multiple things could then take place:

  •  A personalised in-store ad displayed on a store screen (showing one of the browsed pair of shoes)
  •  A personalised one-time offer to the user’s smartphone to trigger buying
  • Quick access to product information and availability via smartphone notifications
  • An alert to a store assistant to help with product and size availability

Similarly, a marketing campaign could first drive buyers to an online store and then into a physical store, constantly knowing the steps the customers take and provide support — from product recommendations through promotions and guidance, to collection and payment. The customer could move flexibly between channels and would not need to restart from the beginning.

Instead of broadcasting a set of one-fits-all campaigns through multiple solo channels, the channels of engagement are more aware of the individual and support the buying process in a personalised way.

The transition to omni-channel retail

So what does it take for a retailer to build omni-channel capability? Generally, we are talking about the capability to:

(i) reach and interact with customers individually and real-time at all moments of the shopping journey to create a seamless shopping experience, (ii) based on a thorough understanding of the customer’s past and current purchase journeys, as well as the shopping context she is experiencing right now.

With most online retailers, these capabilities have been built at the core of the whole retail process. However, until recently, brick-and-mortar stores have been the missing link to true omni-channel shopping because of their limited capability to reach and interact individually, or to process contextual data real-time.

So for most retailers aspiring to make omni-channel shopping a reality, their physical stores will play the lead role in building up this capability. From a technical perspective, there are three core enablers:

    1.    the ability to gather rich analytical and contextual information from physical stores and integrate these to other retail data such as loyalty/CRM, POS, web, and so on,
    2.    the ability to locate people individually in-store, and
    3.    the ability to process a vast amount of contextual and historical data real time, to be able to trigger omni-channel engagements real time, as customers advance in their journey.

From in-store analytics to omni-channel engagement 

Based on our experiences from hundreds of implementations of in-store omni-channel solutions with leading retailers, we’ve summarised a 4-step best practice in how the transition to omnichannel retail typically unfolds (see figure below).

The four key steps in the transition to omni-channel retail

The process ideally begins with setting up detailed in-store customer behaviour analytics that makes use of multiple data sources such as Wi-Fi sensors, door counters and POS data. This is a critical step as it enables the collection of both detailed operational KPIs as well as real-time contextual information that forms the basis of omni-channel engagement in physical stores. Indeed, those who are familiar with adopting web based marketing automations systems know that collecting website visitor data is always the first step in the process.

The second step in the omni-channel transition is usually the in-depth analysis of in-store behaviour, to identify central patterns and to understand and test key models of engagement. This also means setting up the capability for measuring the store specific impacts from marketing campaigns, improvements in customer service, and in-store customer engagement.

Thirdly, we move towards the individual engagement. Retailers use historical and real-time in-store data to determine the optimal location and content of in-store digital advertising screens -- a key channel for modern omni-channel customer engagement. In particular, dynamic display content is guided by shopper profiles and shopping patterns identified from precise in-store and omni-channel analytics data.

The fourth and final step is the ability to locate and reach customers individually, at any part of their visit to a store. Having meaningful contextual data, being able to accurately position of individual customers indoors, and the real-time processing of data from multiple sources are required to be able to trigger meaningful interactions as a customer moves along in the store. At this point, the system needs to understand both in-store patterns as well as the customer’s past interactions in other channels.

The process perspective: How to make it happen?

Taking technological and implementation considerations aside, we’ve also noted a few critical process aspects common to the successful implementation of an omni-channel approach:

    1.    Adopting a lean process for the continuous improvement of operations, revenue & profit
    2.    Adopting a lean process for real-time and adaptive personal marketing
    3.    Equipping customer facing staff with modern tools to improve service

A lean approach to improvement is important as retailers begin to be fed in with detailed and real-time data from physical stores. Instead of long-planned and long-implemented development projects, leading retailers are moving into rapid cycles of small improvements all guided by hard data and metrics. “Test, measure, implement” is the mantra for those familiar to the agile approach to development. This approach would hold for both operative improvements as well as personalised omni-channel customer engagement.

When’s the time for omni-channel?

While implementation of complete, seamless omni-channel customer journeys are still rare, all the components needed have been available for some time, and most retailers seem to be moving ahead with the first steps of the transition. In our experience, building a robust omni-channel capability -- including the new process approaches -- takes a considerable amount of time and effort. Even so, my prediction is that a number of full-scale implementations of the four steps (rather than point solutions and pilots) will be witnessed during the next 12 months.

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Walkbase provides a retail analytics solution for improving the impact of marketing on physical stores and personalising in-store shopping experience.